Posted on Wednesday, 6th October 2010 by Toby Duncan
If I agreed to loan you $5,000 but told you you had to repay $40,000, would you do it? Of course not. More and more lenders are popping up, offering such “help.” Most of these loans have outrageous interest rate ranging from 100% – 800% and up. Yes. You read that right – 800%.
I had to take out a calculator to do the math on this Cashcall loan. The rate sheet does not give you the total amount you’d repay over 84 months. 84 months is 7 years. $486.58 * 84 = $40,872.72.
Common!
I’m just guessing here but a person would have to be pretty desperate to take out such loans. In fact, this is what every person who has taken these loan tells me – “they offered me money and I really needed it.” What’s particularly offensive is the “we understand” language on their home page:
At Cashcall, we understand that life can be unpredictable. That’s why we offer a quick and convenient application process so you can get the money you need, when you need it, even if you don’t have perfect credit.
Please be careful about taking out these loans! Most will require you pledge your next paycheck(s) or your car or some other collateral. As always, read the find print and ask for a calculator to crunch the numbers.
Currently, Payday loans are illegal in 15 states – not including California.
Disclaimer: Unfortunately, it is impossible to give legal advice over the internet, no matter how well researched or written. Before relying on any information I give, contact a lawyer to discuss your particular situation. I am a San Francisco bankruptcy attorney. The information given is based on California law.
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